JP Morgan Cazenove hits Sophos with 'overweight' rating, hikes target

JP Morgan said the shift had been driven by a number of factors.

Firstly, the analysts said Sophos had now progressed past 2019, which was challenging year-over-year due to tough comparatives, hardware refresh cycles extending and a mix shift that was in the process of taking place.

"Following a tough FY19 and multiple guidance misses, we think management has been more conservative in providing expectations for FY20," said JPM.

JPM also noted that the first quarter of 2020 would be "a critical catalyst", with the prospect for a reacceleration of billings looking "favourable".

"Momentum is the key driver of the shares, in our view, and we believe we are at an inflection point," said JPM.

The analysts, which also upped their target price on the group to 480p from 385p, noted that consensus earnings momentum "should pick up from here", which would, in turn, drive the firm's current trading multiples off the low end of their historical ranges.